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Wells Fargo is still in the aftermath of his fake bill scandal.
Justin Sullivan / Getty Images
Wells Fargo
the shares rose as the bank’s results in the first quarter were better than analysts’ expectations.
The bank posted revenue of $ 1.05 per share on revenue of $ 18.1 billion, which obscured the estimate of 71 cents per share of $ 17.5 billion in revenue.
The result was much stronger than in the previous quarter, when Wells Fargo (WFC) earned one cent per share on $ 17.7 billion in revenue because of the economic impact of the coronavirus pandemic. Net income is $ 4.7 billion, up from $ 653 million a year ago, in part because the bank released $ 1.6 billion from its reserves that it set aside for loan losses.
Wells Fargo shares rose nearly 5% in the morning trading.
“Our results for the quarter, which included a $ 1.6 billion pre-tax reduction in the credit loss allowance, reflect an improved U.S. economy, continued focus on our strategic priorities and ongoing support for our clients and our communities,” “said Charlie Scharf, chief executive of the bank, in a statement.
Wells Fargo has been one of the most watched banks over the past year, as it continues its aftermath of its counterfeit scandal, which erupted in 2016. Wells Fargo has smaller commercial and investment banking businesses than its peers. benefited less from the increase in trade and transactions that took place during the pandemic. Its shares have lagged behind much of the past year.
In recent quarters, Scharf has highlighted the work ahead of Wells Fargo. On the list is the streamlining of operations and work is underway to remove a $ 2 billion limit on its assets set by the central bank in response to the fake accounts scandal.
In the first quarter, the bank’s return on average tangible ordinary shares was 12.7%, lower than in the previous quarter. Its efficiency ratio, a measure derived by dividing a bank’s non-interest expenses by its net income, rose by 3 percentage points from last year’s first quarter to 77%, but by 7 percentage points from last year’s fourth quarter improved.
“We also continue our commitment to simplify the company and focus our resources on our core customers. “During the quarter, we announced the sale of our asset management and corporate trust businesses and increased our resources dedicated to initiatives to help drive the growth of our core franchises,” said Scharf.
Wells Fargo shares rose 38.3% this year, beating the KBW Bank Index (BKX), which rose 27%
S&P 500,
by 10% higher.
JPMorgan Chase
(JPM) and
Goldman Sachs
Group (GS) reported its earnings earlier in the morning. Both were much stronger than expected, thanks to an increase in trade and transactions.
Bank of America
(BAC) and
Citigroup
(C) reported Thursday, while
Morgan Stanley
results are available Friday.
Write to Carleton English at [email protected]